Should I stay or should I go now?
David Clay reports on whether you can place an employee on garden leave after they have already been terminated without notice.
In an unfair dismissal claim, the effective date of termination (EDT) is the date on which the contract of employment is deemed to have been terminated. An EDT is required to determine when the limitation period for issuing a claim starts to run, the employee’s continuous period of employment and for calculating compensation.
A recent case in the Employment Appeal Tribunal (EAT) considered the EDT where the employee was summarily dismissed, but was subsequently given notice.
The case concerned Ms Parkin, the managing director of Cosmeceuticals Limited. The company’s board had concerns about Ms Parkin’s performance and, on returning from a sabbatical, the chairman informed her on 1 September 2015 that she could not return to her role. Three days later she was put on garden leave. Discussions followed and on 29 September the chairman wrote to her giving notice of termination ending on 23 October 2015.
Ms Parkin brought a claim for unfair dismissal. The tribunal determined that her claim had been issued within time, as whilst the 1 September meeting constituted clear communication of dismissal, the EDT fell at the end of the subsequently-given notice period on 23 October.
The EAT disagreed with this approach stating the summary dismissal was clearly communicated on 1 September and this was effective as the EDT. The EAT explained that the EDT is a statutory concept and does not depend on the intentions of the parties or whether the employer should have given notice, but an assessment of the facts. If there is an effective dismissal then there can be no subsequent period of notice or garden leave as the contract has already come to an end. The decision meant that Ms Parkin’s claim was likely to be presented out of time.
The outcome of this case was favourable to the employer as it may mean that Ms Parkin’s case may be dismissed for being issued too late. However, this will not always be the case, as a failure to give notice could allow an employee to join a competitor with immediate effect and/or render post-termination restrictions unenforceable. Any communication about termination, whether verbal or otherwise, should always be absolutely clear as to the notice that is being given.